SentinelOne, Inc. (NYSE: S) is a specialist in providing cyber security services across the globe. Its most popular offering is the Singularity XDR platform, which equips enterprises with an extended detection and response system to safeguard against cyber threats.
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The company is headquartered in Mountain View, CA. Over the years, it has made a mark for itself in the cyber security space and went a step ahead to explore more opportunities by going public in 2021.
The initial public offering (IPO) of shares was a success. SentinelOne offered 41.68 million shares (including to the public, underwriters, and those sold through private placement) at an offer price of $35 per share. The initial price band was $31 per share to $32 per share. The gross and net proceeds from the IPO were $1.4 billion and $1.38 billion, respectively.
Although, since its listing on the exchange, a clear downward in the company’s share price has been visible, its popularity in the analysts’ community is still strong. On TipRanks, SentinelOne has a Moderate Buy consensus rating based on 10 Buys and four Holds. SentinelOne’s price target is pegged at $34.86, suggesting 47.34% upside potential from current levels.
The company’s journey since the IPO has been briefly discussed below. This could help investors learn more about the company and form an opinion about it.
Price Movements and Market Capitalization
SentinelOne’s first trading day on the exchange was June 30, 2021. The opening price on the day was $46 (31.4% above the IPO price), while the highest level was $46.50 (32.9% premium), and the lowest level was $41.11 (17.5% premium). The closing price on the day was $42.50 (a 21.4% premium).
Despite the initial strength, the stock lost momentum gradually and has declined by 44.3% since the IPO. Notably, the stock has gained 9.5% in the past five trading days. Presently, the company’s market capitalization is $6.5 billion.
Important Milestones
SentinelOne has reported four quarterly results since it got listed on the exchange. Its bottom line surpassed the consensus estimate in three of the last four quarters while lagging estimates in one.
In June 2022, the company reported its results for the first quarter of Fiscal 2023 (ended April 30). Revenues in the quarter expanded 109% from the year-ago quarter, customer count was up 55%, and annualized recurring revenue surged 110%.
In May 2022, the company strengthened its Singularity XDR platform with the buyout of Attivo Networks. The acquisition, valued at $616.5 million, was announced in March 2022.
Growth Prospects and Projections
Growing instances of cyber attacks and threats related to them have created a huge addressable market for cyber security firms like SentinelOne. The company seems well-positioned to leverage such a large market on the back of its solid product and service offerings, innovation and technological capabilities, and experienced team.
Furthermore, its presence in multiple countries, including Israel, Europe, the Americas, Asia, Japan, Africa, the Middle East, and others, reflects its global recognition. A solid customer base in end markets like finance, healthcare, energy, manufacturing, the federal government, healthcare, and education raises its competitive appeal.
The company’s efforts to boost capabilities through buyouts are appreciable. It is also working to keep a check on its cost of sales and operating expenses.
Earlier in June 2022, SentinelOne’s CFO, Dave Bernhardt, said, “Our platform unit economics and highly efficient business model uniquely position us to pair hyper growth with meaningful margin expansion and our first-quarter results clearly demonstrate this success.”
For Fiscal 2023 (ending January 31, 2023), the company projected revenues to be within the $403 million to $407 million range, higher than the previously stated $366 million to $370 million. Non-GAAP gross margin is forecast to be in the 69% to 70% range, up from the 65% to 67% range expected earlier.
Opinions on the Stock
A few days ago, Brian Essex of Goldman Sachs reiterated a Buy rating on SentinelOne stock, while lowering the price target to $45 (90.19% upside potential) from $52.
Another analyst, Fatima Boolani of Citigroup, maintained a Neutral rating on S, while decreasing her price target to $30 (26.8% upside potential) from $45.
According to the TipRanks Risk Analysis tool, SentinelOne’s top risk category is Finance & Corporate, which adds 22 risks to the 57 risks identified for the stock. Tech & Innovation and Ability to Sell contribute 10 risks each to the total.
Conclusion
With a large addressable market, solid footprints globally, and impressive offerings, SentinelOne could be an attractive investment choice for long-term investors. Meanwhile, the stock could be an attractive choice for risk-taking investors in the near term.
